Corporate governance and regulation: Can there be too much of a good thing?
Valentina Bruno and
Journal of Financial Intermediation, 2010, vol. 19, issue 4, 461-482
We investigate how company-level corporate governance practices and country-level legal investor protection jointly affect company performance. We find that in any legal regime there are a few specific governance practices that improve performance. Companies with good governance practices operating in stringent legal environments, however, show a valuation discount relative to similar companies operating in flexible legal environments. At the same time, a stronger country-level regime does not reduce the valuation discount of companies with weak governance practices. Our analysis suggests a threshold level of country development above which stringent regulation hurts the performance of well governed companies or has a neutral effect for poorly governed companies.
Keywords: Corporate; governance; Country; regulation; Company; valuation; Cost; of; capital (search for similar items in EconPapers)
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Working Paper: Corporate Governance and Regulation: Can There Be Too Much of a Good Thing? (2007)
Working Paper: Corporate governance and regulation: can there be too much of a good thing ? (2007)
Working Paper: Corporate governance and regulation: can there be too much of a good thing? (2006)
Working Paper: Corporate Governance and Regulation: Can There Be Too Much of a Good Thing? (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinin:v:19:y:2010:i:4:p:461-482
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